Alliance Calls for Fresh Thinking on Public Expenditure

Responding to the news that the Northern Ireland Executive has made initial decisions regarding cuts in public expenditure in order to address a gap of £370m in the current Budget, Alliance Party Finance Spokesperson, Stephen Farry, has called for fresh thinking to ensure that the maximum value is obtained from public spending. In particular, he has called for a renewed emphasis on early intervention to address cost pressures.

Stephen Farry stated:

“The New Year is likely to bring new public spending challenges as the Stormont Executive reveals how it plans to address the £370m funding gap for the 2010/11 Financial Year. Departments are already struggling to meet the requirement for 3% efficiency savings. Looming in the immediate future are potential considerable cuts to the Northern Ireland Block Grant by an incoming British Government.

“I would be very concerned at an approach that now finds the £370m through top slicing Departmental expenditure, and just doing the same, but less. In particular, there is a danger that important work is not lost and opportunities missed. Fresh thinking is required to both sustain public services and also to retain the ability to modernise our economy.

“Alliance has long highlighted the considerable financial distortions and lost economic opportunities that arise from trying to manage rather than address divisions in our society. While it will take time to address this major structural problem, it is most disappointing that the Executive has not yet made a start. The objectives of tackling sectarianism and segregation and building our economy while protecting public services are fundamentally linked.

“At times of financial pressure, there is a temptation for Departments and agencies to retrench and to protect what are viewed as core of statutory functions and to forgo discretionary expenditure. This can be a false economy. There are a wide range of aspects of this society which create disproportionate pressure on public finances. A shift in the balance of resources in favour of early intervention or preventive work is required.

“For example, it is much more effective to invest in public health measures and addressing health inequalities than to deal with patients when they get to hospital. Similarly, it is less costly to invest in social work in the community than it is to fund children being placed in care. Also retaining the capacity to invest in modernising our economy should create additional revenue.”